Tuesday, May 24, 2011

Consumer Survey of Egg Preferences

Funding provided by the University of Kentucky Food Systems Innovation Center.Survey design and administration by the students of AEC 580-003, Competition Team and Consulting Practicum.

Executive Summary and Recommendations

This report contains the results of a sensory evaluation experiment and consumer survey about egg preferences and consumption in Lexington, Kentucky, with special emphasis on locally produced eggs.With the rapid expansion of farmer’s markets and small-scale egg production, the project is intended to assist local egg producers with marketing decisions.A sample of 85 consumers was recruited for a blind taste test in which each respondent ate three samples of scrambled eggs: conventional store brand eggs, branded cage-free eggs available at the supermarket, and locally produced eggs from two area farms.On average, consumers most preferred the commercial cage-free eggs, followed by the locally produced eggs, with the conventional eggs being least preferred.The differences were small enough, however, that they were not statistically significant.

Over 30 percent of consumers stated they were willing to purchase local eggs at a price higher than $3.00 per dozen.Willingness-to-pay for locally produced eggs was highly correlated with patronage of a local supermarket that specializes in value-added foods.Consumers who placed high importance on a balanced diet, were brand-conscious, had higher education levels, and valued animal welfare were also more likely to pay a premium for locally produced eggs.The segments least likely to pay a premium were price-conscious consumers, higher-income shoppers, primary grocery shoppers, and those with more children.

Marketing recommendations for small-scale producers include recognizing that two groups of consumers exist.Many consumers are not familiar with locally produced eggs or where to buy them, indicating a role for consumer education and promotion.A second group exists that is familiar with locally produced eggs and expects them to be more nutritious, safer, tastier, and more visually appealing than conventional commercial eggs.Marketing and production efforts should recognize and justify these high expectations, and in return, this niche segment of consumers is willing to pay a sizable premium.Regarding product placement, most consumers did their typical grocery shopping in a large retail chain store, but consumers shopped at a surprisingly wide range of food stores on a monthly basis, including value-added stores and farmer’s markets where locally produced eggs are most likely to get shelf space.

Introduction

A recent study was conducted by students from the College of Agriculture at the University of Kentucky. This was a sensory evaluation and willingness-to-pay survey that targeted potential consumers in Lexington, Kentucky. After reading and agreeing to an informed consent form of participation, consumers were asked to perform a single-blind sensory evaluation taste test.The consumers were exposed to Locally Produced, Commercial Free-Range and Conventional eggs.Unaware of which sample they were evaluating, they were asked to answer a set of questions.Each sample was labeled with a randomly selected number that would correspond with a specific egg.This would help to eliminate bias.The goal of the sensory evaluation is to find the attributes consumers find most important and to help determine whether taste is something to consider when purchasing a type of egg.After evaluating the collected data, the goal is to know whether there is a difference in taste between different types of eggs and which taste consumers prefer.This could be valuable information for creating an effective marketing strategy.

Immediately following the sensory evaluation, the survey participant was asked a number of questions in regards to their purchasing habits.Our goal was to find out what factors play a significant role in the consumption and purchasing patterns of egg consumers.Upon collecting such data, this type of information could essentially assist producers in their marketing strategy, as well.The data collected covers a wide range of interrelated topics.Combined, the data collected will give an idea of the purchasing habits of a typical consumer.This will include how often consumers purchase eggs, why they purchase eggs, what attributes they find most desirable and how much they are willing to pay for these attributes.It will give an idea of how well informed the average consumer is.Upon looking more closely at the data, specific producers will hopefully have a better understanding of who their target market is and how to adjust their practices accordingly.

Previous Sensory Evaluation Studies of Eggs

Many studies on egg taste and quality have been carried out over the past few decades; however, most of these have been directed at the chemical properties of eggs and the effects of changes in chicken diet on egg chemistry. For example, a 1982 study by Joseph Maga discusses the chemical composition of eggs and the relation between changes in chemical composition (diet, etc.) with regards to respective changes in egg quality and flavor. Maga concluded (citing an earlier study – Colas et al. (1979) – that changes in protein diet alter egg quality, but not egg flavor. However, Maga also cited another study – McCammon et al., 1934 –that discusses the relationship between feed and flavor (which already were thought to be related at the time) and finds that changes in feed type and rationing can alter flavor and particularly odor. Other studies discussed within Maga’s paper note connections between flavor and breed, storage, and odor absorption, among other things. Maga’s study and those cited by him strongly suggest that changes in the raising of chickens and their care have notable effect on the quality of the eggs produced (Maga 1982). Another study, Designer Egg Production and Evaluation, comes to similar conclusions (Surai and Sparks). Based on these studies it would seem reasonable to expect some difference in taste perception in this study between cage-free, high-omega 3, and commercial eggs. Other studies on the effects of dietary supplementation/changes in flavor and quality come to opposite or mixed conclusions. Examples include: Natural Tocopherol Enrichment and Its Effect in n-3 Fatty Acid Modified Chicken Eggs (Qi, Guang-Hai, and J. S. Sim 1998), Sensory Evaluation and Consumer Acceptance of Eggs From Hens fed Flax Seed and 2 Different Antioxidants (Hayat Z., et al. 2010), and Sensory Evaluation of Egg Products and Eggs Laid From Hens Fed Diets With Different Fatty Acid Composition and Supplemented with Antioxidants (Parpinello, G. 2006). Taste test results vary quite a bit, even though there was consensus that altering content of diet and storage time alters egg content and quality, (though this could be related to the difference between using professional taste testers and the average consumer, as Sensory Evaluation and Consumer Acceptance of Eggs From Hens fed Flax Seed and 2 Different Antioxidants (Hayat Z., et al. 2010) dulynotes).

Other studies of note include a 1996 British study on the consumer market for eggs Segmenting the UK egg market: results of a survey of consumer attitudes and perceptions (Fearne, Andrew, and David Lavelle 1996), which found that there are various classes of consumers within the egg market – for example, it finds that there are a unique group of exclusive free-range purchasers who only buy free-range eggs regardless of price or taste differences, but rather because of animal rights ideals. These classes were found to be highly related to socio-economic background. More recently, an informal study A Good Egg ( Taylor, Kate 2002) taste tested different kinds of eggs-- cage-free, commercial, and two brands of organic eggs. Organic and cage-free eggs scored significantly higher than the commercial brand. On the other hand, another recent informal comparative study The Food Lab: Do 'Better' Eggs Really Taste Better? (Serious Eats 27 Aug 2010) Found that perception had much more to do with mindset of the taster than the eggs themselves, as tasters' choice of preference between cage-free, high-omega 3, and commercial eggs varied under different trials.

Methods

Step 1: The first priority of the group was to determine where we were going to conduct the survey. We could either go to a location separated from the College of Agriculture and even the University of Kentucky. If we had performed the survey away from our area, the advantages were that we would have received a different demographic outside of full-time staff, students and professors. But the disadvantage would be harder recruiting and how to get the necessary participants that would make our results comparable. The researchers decided to survey on campus, but still in the College of Agriculture and in the Nursing College.

The research team next had to figure out in what type of setting to conduct the experiment to ensure that it was a controlled environment. There is a research lab located in the Animal Science building, but the complications with this was the sensory lab was outdated, and did not have the proper cooking measures that we needed. We decided to survey in the Agricultural Economics building. This made it simple to control, to handle all the variables and to have a way to access more people to participate. In the Nursing College, we conducted our research in the study library on the top floor. We received a couple of surveys, but working over on that side of campus did not give us our desired results because it was hard to recruit. The main advantages of our areas is that we received a large majority of the home grocery buyers, it was easier to recruit participants, and it was convenient for the researchers to prepare the eggs for the taste testing portion of the survey.

Step 2: The participants were recruited by advertisement flyers around campus, sending emails to the student body and faculty and simply by going door to door and asking people to come participate. After all the recruitment efforts, we were successful in gathering 85 respondents.

Step 3: Gather all the supplies that were needed to conduct experiment.

-microwave

-cooking ware (coffee mugs and whisk)

-utensils

-eggs (4 dozen of Conventional, Cage-Free and Local eggs)

-water bottles

-survey

Step 4: After having all the materials gathered that are needed to conduct the experiment we separated each group of eggs (Conventional, Cage-Free and Locally Produced) which were labeled with a three digit number on the plate. (the middle number corresponding to which type of egg the participant was tasting.)

Step 5: Each set of eggs were cracked in coffee mugs corresponding with the number on the plate to ensure there would be no confusion in which sample is being tested and the eggs were whisked until mixed thoroughly. The coffee mugs were placed in the microwave and cooked for approximately two minutes to make sure they were fully cooked.

Step 6: The samples were divided on the plates into the appropriate sample size (about 1/3 of the cooked egg) and delivered to the respondents. The respondents were given a water bottle at their station to ensure that they cleansed their pallet after each sample.

Step 7: The respondents completed the survey and their area was cleaned up, and reset with the utensils, water bottle and survey for the next group.

Step 8: After the 85 surveys were completed, the data were entered in a spreadsheet, and the results were analyzed. A complete copy of the survey appears in the appendix to this report.

Results

On average, consumers were most likely to rate the commercial cage-free eggs as tasting “good” or “very good.”Conventional eggs were the least preferred of the three types, but note that the differences in taste ratings were modest, and were not “statistically significant” at the 95% confidence level.The method of preparation (microwaving) was necessary for serving several people at once on short notice, but it is a recognized weakness that probably prevented more respondents from rating eggs as tasting “very good.”Presumably the preparation method did not affect relative ratings across the three egg types.

The local eggs used in the experiment came from two sources, and were labeled with the initials “BB” and “SS.” Given that the two producers’ hens might eat a different diet, we tested for differences in taste and other sensory characteristics.Figure 3 shows that the average taste ratings were almost identical.Although one source was rated more often as “rich” and “smooth,” and the other source was rated more often as “bland,” these differences were too small to be statistically significant.In other words, the results could easily be reversed if a new sample of consumers were surveyed.

Figure 3. Differences between two sources of local eggs were too small to be statistically significant

Following the sensory evaluation portion of the survey, respondents were asked several questions about their egg consumption habits and preferences.The results were used in later analysis to identify the consumer segments most likely to be interested in buying locally produced eggs.

Figure 6. Most consumers do not know of a local “farm fresh” egg producer

Figure 7. Typical weekly egg consumption is one dozen or fewer

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Figure 8. Value-added eggs are niche products

Based on the correlations in the data, consumers who typically purchase eggs from a local farm or farmer’s market are more likely to be concerned with personal nutrition when purchasing eggs. The data indicated a 53% correlation.

Sell-by date was the most important factor in purchase decisions among respondents, reflecting the importance of fresh eggs to consumers as well as food safety. Purchase convenience and price also play a large role in consumer purchasing decisions, with over 50 percent of respondents saying that each was important.Conversely, brand was overwhelmingly seen as not important by respondents.

Figure 10. Importance of selected concerns when purchasing eggs

Willingness-to-Pay for Locally Produced Eggs

Participants were asked to indicate a maximum price they were willing to pay for eggs with different attributes.Figure 11 shows that willingness-to-pay for conventional eggs most often fell into the $1.01-$1.50 per dozen range, and rarely exceeded $2.50 per dozen.Only five percent of consumers were willing to pay more than three dollars for a dozen conventional eggs.Willingness-to-pay was higher for free-range, organic, and high Omega-3 eggs, and most often fell into a range of $1.51-$3.00 per dozen. When consumers were willing to pay more than $3.00 per dozen, it was most likely to be for eggs from a farmer’s market or from a local farmer, with 31 percent of consumers stating they were willing to purchase local eggs at a price higher than three dollars, and 27 percent willing to pay at least that amount at a farmer’s market.The strong correlation of willingness to pay across all price ranges for farmer’s market and local eggs is noteworthy.Even after allowing for some upward bias due to the hypothetical nature of the survey, the results suggest a sizeable niche market.

An important goal of this market research was to identify which segments of consumers are most likely to purchase locally produced eggs at a price sufficient to cover the costs of a small producer.Based on anecdotal information from local egg producers and the observed asking prices for locally produced eggs, $3.00 per dozen was chosen as an approximate threshold, below which many small egg businesses might not be financially sustainable.The strongest direct correlation (52%) with willingness-to-pay was with Good Foods Co-op customers.Good Foods Co-op is a grocery store in Lexington that, for almost 40 years, has specialized in value-added foods, including foods with organic, animal welfare, nutraceutical, and local attributes.Prices tend to be considerably higher than one would find in a mainstream chain supermarket, and it is reasonable that Good Foods customers would also have higher-than-average demand for locally produced eggs.

Figure 11. Maximum willingness-to-pay for selected types of eggs

The effort to identify promising consumer segments included a statistical analysis called a logit regression.The regression isolates the impact of specific consumer characteristics on willingness-to-pay more than $3.00 per dozen for locally produced eggs.Table 2 shows the characteristics that were statistically significant at the 0.10 level, i.e., we are highly confident that these characteristics impact consumers’ willingness-to-pay.The impact on likelihood of paying more than $3.00 per dozen for locally produced eggs is shown by an odds ratio.For example, the odds of paying more than $3.00 per dozen are 4.3 times higher for each successive point onthe 5-point scale measuring importance of a balanced diet.Brand-conscious consumers, those who value animal welfare, and those with more education are also more likely to express willingness-to-pay more than $3.00 per dozen for locally produced eggs.

On the other hand, price-conscious consumers, primary grocery shoppers, those with more children, and those with more income are less likely to pay $3.00 per dozen.For example, the odds of being willing to pay $3.00 per dozen are less than one-third as high in a household with two children, as opposed to a household with one child.It may seem odd that education and income have opposite effects on willingness-to-pay for locally produced eggs, because education and income are often correlated.In a regression analysis, however, the impact of each characteristic is measured as if all other factors were held constant, so one can see the isolated effect of each characteristic, instead of the combined effect.

Table 2.Odds ratios greater than one imply higher willingness to pay more than $3.00 per dozen for locally produced eggs

Odds Ratio

Importance of a balanced diet

4.3

Price conscious

0.5

Brand conscious

2.0

Importance of animal welfare

2.1

Primary grocery shopper

0.2

Number of children

0.3

Education

3.0

Income

0.4

Figure 12 shows the frequency per month that consumers were willing to pay a higher price for cage free or free range eggs than for conventional eggs.Most consumers (67 percent) reported that they would not pay a premium for cage free or free range eggs more than once per month.However, 18 percent of respondents reported that they would pay more four or more times per month.

Figure 12. How many times per month survey participants are willing to pay more for cage-free or free-range eggs vs. conventional eggs

Figure 13 shows the attitudes that consumers hold about the differences between conventional eggs, and eggs from a farmer’s market or from a local farmer.Most respondents were not familiar with local eggs.However, those who were knowledgeable, or at least familiar with local eggs, held generally favorable opinions towards local eggs.Consumers mostly felt that the nutrition, safety, taste, and value were higher with local eggs.They also reported higher expected price for the eggs from local producers.The aspect that was similar across the two types of eggs was the visual attractiveness of both the packaging and the eggs themselves.

Figure 13. Expectations about how eggs from a farmer’s market or local farm compare to conventional eggs

Table 3. Demographics of Survey Respondents (n = 85)

Primary Household grocery buyer

Primary grocery buyer

81%

Not primary grocery buyer

19%

Household type

Rural household

9%

Urban or suburban household

91%

Education level

Less than 8th grade

0%

High School /GED

5%

Some College

19%

Two year degree

7%

Four year degree or higher

65%

Household income

Less than $20,000

14%

$20,000 - $35,000

15%

$36,000 - $59,000

26%

$60,000 - $74,999

8%

$75,000 +

32%

Gender of participants

Male

45%

Female

55%

Age

Under 18

2%

18-25

28%

26-35

19%

36-45

13%

46-55

16%

56-65

12%

66-75

5%

76+

2%

Almost 92% of respondents reported typically purchasing groceries at a national chain store such as Kroger, Wal-Mart, etc., with a tiny minority typically purchasing groceries at warehouse stores or natural / value-added food stores such as Good Foods Co-op, Whole Foods, and Fresh Market.

Although the vast majority of respondents did their typical grocery shopping at large chain stores, Table 4 shows that many consumers visited multiple grocery stores for additional food purchases during the last month.The table suggests that local producers seeking to sell eggs in a store may benefit by marketing to the small but motivated target audience at value-added food stores, rather than attempting to sell in large chain stores.Even consumers who typically buy groceries at a national chain store occasionally shop for selected items at value-added stores, and it is generally easier to place products in stores that emphasize local and value-added products.

Table 4.Number of consumers visiting each store within last month (n = 85)

Kroger

79

Meijer

31

Wal-Mart

47

Save-A-Lot

3

Fresh Market

11

Convenience Store

5

Whole Foods

10

Goods Foods Co-Op

18

Sam’s Club

19

Aldi

5

Farmer's Market

2

Other

4

Table 5 shows that consumers in Lexington have easy access to many options for grocery shopping, and this area may be a special case.Many of the 85 respondents could access most of the stores within 15 minutes or less.The fact that only 35 respondents reported being within 15 minutes of a farmer’s market is interesting, because Lexington contains multiple farmer’s markets, including a large downtown farmer’s market.This suggests a role for promotion and education about farmer’s markets, although it is likely that many of the least informed consumers are those who do not seek information because they do not want to shop at farmer’s markets.

Table 5. Number of respondents who could reach each store in 15 minutes or less (n=85)

Kroger

76

Meijer

50

Wal-Mart

68

Save-A-Lot

36

Fresh Market

35

Convenience Store

53

Whole Foods

43

Goods Foods Co-Op

39

Sam's Club

32

Aldi

30

Farmer's Market

35

Other

4

List of Students Who Designed the Market Research and Prepared the Report

About the University of Kentucky Food Systems Innovation Center

The FSIC is a Fee Based Service Center, in the College of Agriculture at the University of Kentucky. The FSIC strives to serve Kentuckians in developing, commercializing and improving food products and food businesses. For more information on the center visit www.uky.edu/fsic